An activist protests against climate change in New Delhi, India. In a Forbes.com interview, … [ ] influential economist Lord Nicholas Stern said that an emissions commitment from India could be pivotal in the global fight against climate change.
Hindustan Times via Getty Images
With the U.S. officially rejoining the Paris Agreement on Friday, and major climate commitments from Asian powerhouses China, Japan and Korea, an awaited announcement from India could bring two-thirds of the world on course to achieve net zero carbon emissions around the middle of the century. Meanwhile, the coronavirus pandemic has shown that only international collaboration can solve global-scale crises, while underlining the vital connection between human health, biodiversity and the natural environment.
These are some of the conclusions highlighted by two leading figures on climate and infrastructure, Lord Nicholas Stern, chairman of the Grantham Research Institute on Climate Change at London School of Economics, and Jin Liqun, president of the Asian Infrastructure Investment Bank and former vice minister of finance for China, in a chat with this publication.
Both men emphasized that specific national commitments on emissions were crucial to achieving large-scale, measurable progress on climate action. U.S. President Joe Biden’s renewed commitment to the Paris Agreement was “a very important decision for the future of climate action and the future of the world,” Stern said, adding that with China’s commitment to net zero carbon emissions by 2060, along with subsequent target announcements from Japan and Korea, “we’ve had a real shift in expectations in this last year.”
“I think this is very important for the biggest economy in the world,” Jin said of Biden’s recommitment to Paris, along with his $2 trillion climate infrastructure plan. “It was inconceivable that almost all the world is promoting climate change mitigation while the biggest economy was left outside.”
Stern said that, should India make a commitment to net zero emissions similar to that of China, “you’re going to have something like two thirds or more of the countries of the world targeting net zero.” As the third largest emitter of greenhouse gases after China and the U.S., the prospect of India announcing such a target would offer “a real increase in optimism” in the climate fight. “I think we could see a major announcement on that in the next few months,” Stern added.
Both Stern and Jin agreed that the coronavirus had highlighted the necessity of multilateralism in tackling global challenges.
“Covid-19 has reinforced the principle that only by working together can we solve these huge global issues,” Jin said, adding that he hoped the pandemic had produced “an enhanced sense of cooperation between nations. We will be able to build consensus around a concerted effort to fight climate change in the decades to come,” he added.
Stern agreed, saying of national commitments: “It changes the whole picture of investment and technology. If you’re making investments, you’re going to be much more careful about your emissions, and on the more positive side you’re going to recognize where the markets are and where the new technologies are emerging.”
It is fifteen years since Stern published his The Economics of Climate Change: The Stern Review, now recognized as a landmark text on the subject, which reviewed evidence for the impacts of climate change. He reiterated a key finding from that review, saying: “One of the absolutely central messages is the cost of acting on climate change is far, far less than the cost of inaction.”
Asia Taking The Reins
Jin Liqun, who was a vice minister of finance during the leadership of Jiang Zemin in the late 90s, expanded on China’s emissions commitment, announced in September, saying the announcement was “not fine tuning, it’s a major breakthrough. China wants to tackle this challenge head on.”
While some observers responded cautiously to President Xi Jinping’s pledge for his nation to achieve net zero emissions by 2060, Jin said he believed the target had been carefully thought out, having been incorporated into drafts of the country’s 14th five-year plan. “You can expect that the next five-year plan will carry even more weight in this regard,” he added.
Following reforms in the 1980s that led to a prolonged period of extremely rapid economic growth, Jin noted that millions of Chinese had seen their standard of living improve dramatically—but that had come at a cost. “During the first stage of growth, scars were left on the environment and ecosystem,” he said. “Now it’s time to remove the heavy footprints in the environment caused by that fast growth. That, in turn, will further improve the quality of life of the Chinese people.”
As well as wanting to improve domestic prosperity and living standards, Jin said China had a diplomatic motivation for its climate target. “China wants to play an important role in the international, political and economic arena,” he explained. “The nation wants to show that it is a responsible member of the international community. Since climate change is the defining factor of the current era and has a broad-based impact on every aspect of human life, this is something China can—and should—do to contribute.”
British economist Lord Nicholas Stern: “The cost of acting on climate change is far, far less than … [ ] the cost of inaction.”
AFP via Getty Images
Stern addressed criticisms from Western powers that have accused Asian nations of not doing enough to address climate change. He noted the 2014 bilateral U.S.-China climate change announcement between Barack Obama and Xi Jinping had been a “turning point in the preparation of the [2015] Paris Agreement.” Subsequently, he said, Asia had become a global leader in terms of the climate challenge, by manufacturing the hardware that the world needed for decarbonization.
“The driving down of the cost of solar was in large measure a China and Asia story,” Stern noted, referring to the rapid development of increasingly cheaper and more efficient solar panels that have made the technology among the cheapest forms of energy generation available.
Regarding the Asia Pacific nations’ relatively high greenhouse gas emissions, Stern said that with Europe having shifted to a broadly service-based economy, Asia had become “the manufacturing engine of the world, so that’s where emissions are associated. But we [Western nations] share the responsibility as consumers.”
Jin said the old assumptions about moving away from fossil fuels no longer applied in the new technological era of decarbonization. “There was a popular belief in Asia that if you reduced consumption of fossil fuels it would dampen growth. This was a fallacy,” he said. “The sustained development of Asia depends on its success in moving away from fossil fuels, because that’s the only sustainable way for Asia to continue to grow.”
He noted that the impact of climate change on the economy and on the livelihoods of people in East Asia was “already evident. Those countries who do not take quick action to deal with this will, in my view, be left behind. So Asia has every reason to invest in renewable energy in the transition.”
MORE FROM FORBESHow Pioneering Solar Tech Aims To Bring Energy To Gaza’s RefugeesBy David Vetter
Why Infrastructure Is Everything
Stern and Jin discussed infrastructure investment as a way of guarding against social and economic risk, drawing connections between climate change, biodiversity and novel viruses, as underlined by the Dasgupta Review, released this month.
Speaking of the role of his own bank, AIIB, Jin advocated for the need for large development banks to broaden their scope beyond physical infrastructure projects to social and environmental infrastructure, such as healthcare, education and conservation, which would “facilitate stronger economies.”
“A modernized development bank should have a vision,” Jin said. “It should look beyond what is visible to most people, to those factors that are invisible and which will emerge later on. My view is that we should support healthcare as part of the campaign to fight climate change. A healthy nation is productive; a sick nation cannot be productive.”
“Infrastructure is an activity that enables other activities,” Stern said. “Transport enables economic activity to take place; in the same way, a good health system enables, while a bad health system prevents people from engaging in productive activities.”
Stern explained that natural infrastructure could be viewed in the same way, giving the example of coastal mangrove swamps: “Mangroves offer coastal protection, but they are also a habitat for wildlife, and they’re increasingly a source of tourism. So I think we’re recognizing more and more that natural, human and social capital are crucial elements in understanding development and growth.”
The challenges of both climate and Covid-19 emphasized the “importance of internationalism and collaboration in breeding innovation,” Stern said, giving the examples of the new coronavirus vaccines that have been developed at record speed.
“This also is a reason for optimism: we know that China, the U.S., Europe and India disagree on some important things, but if you find an area where you can collaborate, you improve relationships across the board, and you can innovate,” he said.
“Innovation brought us into the fossil fuel era, and it’s innovation that’s going to move us beyond the fossil fuel era.”
